A TECHNICAL UPDATE ON CNX-NIFTY—5.12.2023

 

CNX-NIFTY

Open-20601.95---High—20702.65--Low-20507.75--Close-20686.80 on 4.12.2023.

Support:20599/20568.60/20475/20390/20291.55/20222.45/19991.85/19946/19875.25/19867.55/19849.75/19667/19645.50/19635.30/19627/19584.45/19523.40/19492.10/19480/19333.60/19329.10/19296.45/19253.60/19223.65/19204.85/18973.30/18887.60/18837.85.

Resistance:20719/20751/20914.75/21078/21260.90/21487/21607.05/22219/22463.

 (Bold and underlined figures are most important)

It opened up with a huge up gap and hit a new all-time high 20702.65 and finally ended the day with a robust gain of 418.90 points. It is important to mention here the gap it created today is still there and if it makes an effort to fill the gap in next 3-4 trading sessions, which is technically possible then it can come down to 20291,but if it does not fill the gap in stipulated time then chances of filling the gap will recede. 

It has been exhibiting extra ordinary strength and hitting new all-time high for the last two days, it is in the new territory now therefore, it is likely to extend the up move further from here but due caution is suggested, because in new territory possibility of correction is very high and since it had vertical rise therefore correction could be vertical also at times and it can happen any movement, so ride the on-going up move cautiously and keep a watch on the price action for correction indication. I once again repeat that the on-going up move is likely to continue with intermittent correction, but break below 20482.27 & 20262.56(figure may change) will push it into short and deep short correction mode for its recent rise and break below 20222.45 could be an alert point deep correction. It is in the long term uptrend and bias is bullish as of now and it is buying on decline market till it indicates otherwise. 

It is important to mention here that all the five important technical indicators on the daily chart are positive now, therefore the on-going up move can extend further provided it holds the key points mentioned above, furthermore despite the robust rise still three out of five indicators on the weekly chart and one out of five indicators on the monthly chart are negative, which is slightly concerning and indicates that after the on-going up move exhaustion it may still witness deep fall in coming weeks/months. But please note that as long as price action remains positive there is no major threat and up move can extend with intermittent correction and weekly and monthly indicators may turn positive also in coming days. So watch out. 

Moving up from here it may face resistance at 20719---20751---20914.75----21078---21260.90---(figure may change), it may correct at any of these points and then may resume the up move again or rally may exhaust also, so be watchful.

Kindly note that moving down from here its strong support points would be at 20599---20568.60---20482.27---20390---20291.55---20262.56----20222.45---20168---19991.85---19948.48---19875.25----19849.75(figure may change) it may bounce back from any of these points, but break below each support point could weaken it and can drag it down further, which please note.

TRADING TIPS:--

1. Long trade can be tried on decline near 20520 with a stop loss of 20470 or if it move above 20703 and maintains above it for some time with a stop loss of 20620.But aggressive traders can also try long trade on the sharp decline near or within the range of 20260----20222 with a stop loss of 20120.

 2. It is in the long term uptrend therefore short trade in general could be a highly risky affair, but even then short trade can be attempted on reasonable rise for intraday corrective gains but with extreme caution and alert. Short trade can be tried on the rise near or within the range of 20850—20880 with a stop loss of 20930.

NOTE: - If it opens up with huge gap up then wait for it to settle down before initiating long position, but short trade can be attempted on huge gap up if it is near the selling point and vice versa . Since, it is showing volatility so any type of trade should be squared off during the day, if you don’t have reasonable profit margin in the trade. Day squaring off is strongly suggested in any case.

Disclaimer:-The view expressed here are solely of the author and he is not at all responsible in any way for the outcome of the trade you enter based on the above view.

Kindly note that make your cost your stop loss in favorable trade and then trail it as the price move up/down to gain maximum profit and avoid losses. Use support and resistance levels as entry, exit, target and trailing stop loss points. DO NOT TRADE WITHOUT STOP LOSS. 

Note: Price stated here are of spot market. 

 

Thanks 

Narendra Kumar Surana

Mobile—8240951127/9831313654.

 Email--- suranank@gmail.com